As the year comes to a close, Swedish limited companies (Aktiebolag or AB) must address several key financial and administrative tasks to ensure compliance with Swedish law. Failing to meet these obligations can lead to fines, penalties, or, in the worst-case scenario, forced liquidation. Whether you’re a seasoned business owner or just starting your company journey in Sweden, staying on top of these requirements is essential. This guide will walk you through the most important year-end obligations for Swedish ABs.

Appointing an auditor

One of the first things to check at year-end is whether your company is required to have an auditor. While not every Swedish limited company needs one, certain criteria must be met for an audit to become mandatory. The appointment of an auditor is required if the companies have met at least two of the following requirements in the previous two fiscal years:

• The company’s annual turnover exceeds SEK 3 million.
• The balance sheet total exceeds SEK 1.5 million.
• Your company has more than 3 employees on average during the financial year.

If your company falls under these thresholds, you’re exempt from appointing an auditor, but for larger businesses, this is a key year-end obligation. If your business has experienced growth over the year, it’s worth reviewing these criteria to see if you now need to bring in an auditor. Should this be the case, an auditor must be appointed ahead of your financial statement filing.

Even if your company doesn’t legally require an audit, some business owners voluntarily engage an auditor to add an extra layer of security and ensure the books are in top shape. This can help with future investments or partnerships where transparency is essential.

Reviewing net assets: avoid negative equity

Another critical year-end obligation is reviewing your company’s net assets, ensuring that your equity remains above the required threshold. Under Swedish law, the net assets of your AB must be at least 50% of the share capital. If your company’s equity dips below this threshold, you could be heading into dangerous territory.

Negative equity can trigger the need for a kontrollbalansräkning (a balance sheet for liquidation purposes). If the situation isn’t addressed quickly, your company could face mandatory liquidation. To avoid this scenario, business owners should regularly monitor their financial health, especially towards year-end when major adjustments are made to the books.

If your company’s net assets are dangerously low, you may need to raise capital or restructure finances before the end of the year. A business loan, new investments, or cutting down expenses can help restore a healthier balance sheet. If this sounds complex, it’s advisable to work closely with a professional accountant to stay on top of your company’s financial standing.

Read further about negative net assets

Don’t forget to renew your preliminary tax

Swedish limited companies are required to pay preliminary tax based on their expected annual profits. This is an estimate that you need to renew annually, adjusting according to the company’s performance. As year-end approaches, it’s crucial to review your tax situation and file any necessary adjustments to the Swedish Tax Agency (Skatteverket).

Businesses whose actual profits differ significantly from their initial estimates must take care of this early. Underpaying or overpaying tax could lead to unnecessary costs, penalties, or delayed refunds. Renewing preliminary tax in time ensures your business remains compliant, and it’s an opportunity to make sure the tax paid is accurately aligned with the year’s earnings.

You’ll need to submit a new preliminary tax return with any adjustments. If this feels like a daunting task, 1Office Sweden can help you make sure your tax obligations are taken care of efficiently and accurately.

Filing the annual income tax return (Inkomstdeklaration 2)

All limited companies in Sweden are required to file an Inkomstdeklaration 2, which is the corporate income tax return. This must be done after the financial year has ended and forms a vital part of your year-end obligations. The deadline for filing depends on your company’s financial year-end. For most companies, it’s May 2nd of the year following the financial year.

The process involves aligning your tax return with your company’s financial statements. Everything from revenue, costs, tax credits, and deductions must be carefully considered, ensuring no discrepancies between what’s filed with the Swedish Tax Agency and what’s reported in the accounts.

Timeliness is key here, and it’s recommended to prepare the necessary documents well ahead of the deadline. Companies that miss the deadline may face fines, so it’s always best to be proactive. If your company’s accounts are complex, seeking professional accounting services to manage the return filing process is highly recommended.

Filing the annual report

Every company registered in Sweden, including dormant companies and those in liquidation, must file an annual report with Bolagsverket (the Swedish Companies Registration Office) within seven months from the end of the company’s financial year. This requirement ensures that all company activities, even minimal or inactive ones, are documented officially.

Missing this deadline can lead to penalties and additional scrutiny, so it’s essential to submit on time. The annual report typically includes financial statements, a director’s report, and, if applicable, an auditor’s report. These documents provide a clear financial snapshot of the company and are essential for public record-keeping and transparency.

Ensuring VAT compliance

VAT (moms) compliance is another important aspect of year-end reporting. Swedish limited companies may need to file VAT returns monthly, quarterly, or annually, depending on their turnover. The year-end is a good time to review and ensure your VAT returns are up-to-date and reconciled properly.

Ensure all VAT collected and paid is accurately reported, and that any outstanding payments are made to the tax authorities. Businesses sometimes overlook small discrepancies that, over time, can lead to larger issues during audits or tax investigations.

For companies on annual VAT reporting, year-end is especially crucial, as any errors in VAT returns will need to be corrected before the financial statements are finalized. Cross-check all your figures before submitting your final VAT return for the year. A professional accountant can assist with double-checking that no stone is left unturned.

Payroll taxes and employer obligations

If your company has employees, payroll taxes and employer fees also require your attention. Löneskatt (employment tax) and arbetsgivaravgifter (employer contributions) must be paid regularly, and year-end is the perfect time to review whether all contributions have been made correctly.

Each company must submit an arbetsgivardeklaration (employer declaration) detailing all salaries, taxes, and employer contributions for the year. Ensuring this data aligns with what’s in your company’s payroll system is critical to avoid any surprises during tax audits.

Failure to meet payroll tax obligations can result in steep fines, so keeping everything in order is vital. Whether it’s ensuring employees’ pensions are correctly allocated or managing tax on bonuses, everything should be reviewed for accuracy at year-end.

Any other registrations or filings

Finally, don’t forget to check if your company needs to complete any additional registrations or filings specific to your industry. For instance, companies in certain sectors may require environmental permits, licenses, or other regulatory filings, which may have specific deadlines tied to the fiscal year-end.

If your company uses vehicles or specialized equipment, you may need to ensure that these registrations are updated annually. It’s also worth reviewing any other government filings or licenses that may need renewing around year-end to avoid disruptions in your operations.

Stay compliant

Meeting year-end obligations is crucial for maintaining your Swedish limited company’s compliance with the law. From appointing auditors to renewing preliminary tax and filing income tax returns, every step plays a role in keeping your business on the right track. Ensuring VAT compliance, fulfilling payroll tax obligations, and monitoring net assets are equally important to avoid costly penalties and legal issues.

At 1Office Sweden, we understand that year-end can be a stressful time for businesses. That’s why we offer comprehensive accounting and compliance services tailored to Swedish limited companies. Whether you need help with filing, auditing, or tax renewals, our expert team can assist you every step of the way, making sure you stay compliant and avoid costly mistakes.

If you need assistance with your company’s year-end obligations, get in touch with 1Office Sweden today. Our team of professionals can help ensure that your business meets all requirements on time, leaving you free to focus on what matters most—growing your business. Contact us now to get started!